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Harvard’s Timber Empire

Can Harvard responsibly manage its vast timberland holdings?

By Sandra Y.L. Korn

Brasil Timber Limited, Empresas Verdes Argentina, and Scolopax—these sound like the names of corporations you might learn about in a course on “Globalization and Agriculture.” In fact, they’re all timber plantations that Harvard University fully owns.

After suffering a huge drop in its endowment in 2009, Harvard Management Company, the subsidiary that manages Harvard’s $32 billion endowment, has sought ways to “diversify” its holdings. In recent years, this has meant purchasing and managing dozens of timber plantations in the developing world. Although these plantations have different names, local managers, and business practices, many seem to follow the same model. On each timber plantation, a large amount of land is acquired, cleared, and planted with a monoculture of fast-growing trees like eucalyptus or pine. These trees are harvested in a rotating cycle and sold to make paper or wood products.

Under the leadership of a few investment managers—in particular, Managing Director and Head of Alternative Assets Andrew Wiltshire—Harvard has expanded its direct natural resource holdings. Wiltshire used to work for the New Zealand Forest Service, which, according to a reporter from WealthDaily, originally developed the massive Kaingaroa Timberlands in that country. In 2003, two years after he came to Harvard, Wilshire orchestrated HMC’s purchase of Kaingaroa. Though Harvard subsequently sold part of the timberlands, it still made almost $87 million from Kaingaroa in 2011. Wiltshire also oversaw HMC’s subsequent purchase of the Big Sky Dairy Farm in New Zealand, which generated $4.4 million of income for HMC in 2011. Since then, Wiltshire has worked with HMC Chief Executive Officer Jane Mendillo to build Harvard’s investments in “alternative assets,” particularly timber.

Exactly how many timber plantations does Harvard own? Bloomberg News estimates that over 10 percent of Harvard’s endowment—over $3 billion—is invested in “forests, farms, and other natural resources.” HMC’s publicly filed IRS Form 990 lists over 270 companies as “Related Organizations Taxable as a Corporation or Trust”—corporations of which Harvard owns 50 percent or more—and dozens of those hold timberland. As well as New Zealand, Harvard has large timber holdings in Brazil, Romania, Argentina, Chile, Ecuador, and Uruguay.

Unfortunately, Harvard does not have the best track record for responsible management of these plantations. Last year, the Chilean government sued Harvard’s Agrícola Brinzal for felling 189 acres of native forest and then reforesting with a foreign tree species, eucalyptus. This past winter, Romanian authorities arrested a former contractor for Scolopax, a Harvard-owned company that used to be the largest private owner of forests in Romania, on charges of corruption and bribery; Scolopax put its land up for sale immediately afterward.

Some climate activists and researchers have suggested that sustainable forestry could actually help absorb carbon dioxide, mitigating the destructive effects of climate change. I’m not convinced that large-scale planting of eucalyptus trees in Latin America could ever be good for local ecologies.

Yet those concerned about responsible investment at Harvard need not demand that Harvard divest from its timber holdings. After all, as a majority or full owner of these companies, Harvard could ensure sustainable forestry practices across the world—if it made a commitment to responsible ownership.

How will we know whether Harvard’s timber plantations are responsibly managed? Many are already certified by the Forest Stewardship Council, an independent nonprofit that purports to identify responsibly managed forests. EVASA, one of two Harvard-owned timber plantations in Corrientes, Argentina, is certified by the FSC, but this standard means little in the grasslands of Argentina. According to a report published by the Oakland Institute and Responsible Investment at Harvard last fall, “One worker told the research team that [EVASA] portray[s] an unrealistic image of its operations: ‘They know when they are going to come 15 to 20 days beforehand, and they clean everything up; they leave it looking perfect… [T]hey hide the trucks without safety belts when the inspectors come.’”

Perhaps a better way to certify the responsible management of timber plantations is to listen to the voices of those most affected by forestry. This week, two residents of Corrientes, Argentina will be on Harvard’s campus to explain the destructive effects of Harvard’s companies Las Misiones and EVASA on small farmers and rural communities. One, an organizer with Guardianes del Iberá, will speak to the effects of Harvard’s plantations on the Iberá Wetlands. Another, Adrían Obregon, a farmer and representative of the local small producers’ association, knows about the impact Harvard’s plantations have on the farmers they displace: As he noted in a video about Harvard in Iberá, “Without land, we cannot produce. And if we’re not producing, there’s no food. And if there’s no food, there's no life.”

Responsible management of these plantations could start by removing plantations within 2,000 meters of homes, following local labor laws, and completing a participatory study of environmental and social impacts.

Harvard could continue to cut corners, sacrificing native forests, subsistence farmers’ land, and ecological well-being in its efforts to turn a profit. Or, it could use its timberland assets to push forward a sustainable model for global forestry. I hope Harvard takes seriously its “commitment to sustainable investment” and that its “distinctive responsibilities to society” lead it to responsible ownership.

Sandra Y.L. Korn ’14, a Crimson editorial writer, is a joint history of science and studies of women, gender, and sexuality concentrator in Eliot House. Her column appears on alternate Mondays.

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